Commonwealth Bank of Australia (ASX: CBA) shares are moving higher today.
In late afternoon trade, the CBA share price is up 2.4%. That brings the price back above the psychologically significant $100 mark to $102.07 per share, at the time of writing.
A number factors have combined over the past year to give the big banks some healthy tailwinds.
Aussie property prices running red hot
Among the factors helping support the CBA share price (and that of its competitors) is the roaring Aussie property market.
You’re probably well aware that property prices across Australia are getting dearer.
But did you know just how much dearer?
The answer, from property research firm CoreLogic, may surprise you:
Australian housing values increased a further 1.6% in July, according to CoreLogic’s national home value index. The latest rise takes housing values 14.1% higher over the first seven months of the year and 16.1% higher over the past twelve months.
Did you catch that? Sixteen percent higher in 12 months. And during a year of COVID pandemic lockdowns. How did this happen?
“Demand is being stocked by record low mortgage rates and the prospect that interest rates will remain low for an extended period of time,” says CoreLogic’s research director, Tim Lawless.
Galloping housing prices have resulted in a big uptake in Australian banks’ mortgage balances.
As BankingDay reports, RBA lending data shows that “lenders’ mortgage balances grew by 0.7 percent in June, compared with the previous month – the highest level of monthly growth since 2010.”
According to APRA latest monthly ADI data, Commonwealth Bank, National Australia Bank Ltd. (ASX: NAB), and Westpac Banking Corp (ASX: WBC) are a little ahead of the system for the month of June – all recording mortgage balance growth of 0.9 per cent.
Longer term, the lenders’ mortgage balance grew by 5.3% over the 12 months to 30 June, the fastest annual rate in three years.
The CBA share price has likely enjoyed a boost over its major competitors this past year as CommBank has managed to post larger growth in its mortgage balance. CommBank’s book grew by 6.7% compared to a 1.6% increase for NAB and a 2.3% growth rate for Westpac.
CBA share price snapshot
CBA’s share price has gained 46% over the past 12 months, far outpacing the 26% gains posted by the S&P/ASX 200 Index (ASX: XJO).
Year to date, the CBA share price has continued to charge higher, up 22% so far in 2021.